Introduction To Forex

The purpose of this ebook is to introduce the forex market to you. As with many markets there are many derivatives of the central market such as futures, options and forwards. In this book we will only be discussing the main market, sometimes referred to as the Spot or Cash market.

The purpose of this ebook is to introduce the forex market to you. As with many markets there are many derivatives of the central market such as futures, options and forwards. In this book we will only be discussing the main market, sometimes referred to as the Spot or Cash market.

The word FOREX is derived from the term Foreign Exchange and is the largest financial market in the world. Unlike many other markets the FX market is open 24 hours a day and has an estimated $1.2 Trillion in turnover every day. This tremendous turnover is more than the combined turnover of the main worlds’ stock markets on any given day. This tends to create a very liquid market and thus a very desirable market to trade.

Unlike many other securities, (any financial instrument that can be traded) the FX market does not have a fixed exchange. It is primarily traded through banks, brokers, dealers, financial institutions and private individuals.

Trades are executed through telephonic communications and now increasingly through the Internet. It is only in the last few years that the smaller investor has been able to gain access to this market. Previously the large deposits that were required precluded the smaller investors but with the advent of the Internet and growing competition, it is now easily within reach of most investors.